Public-Private Partnerships Offer Digital Divide Solution

Federal action is making significant new resources available to states and localities for broadband programs. The magnitude of this funding enables cities of all sizes to consider bold investments in broadband infrastructure. Where private internet service providers (ISPs) failed to provide adequate service, cities often turn to municipal fiber to the premises (FTTP) models. With the government becoming both infrastructure owner and service provider, these approaches enable municipalities to design networks that serve their residents and achieve policy objectives. However, analysis by University of Pennsylvania researchers of the financial performance of such networks illustrates the barriers to sustainable operation. Analyzing 20 municipal fiber networks, the study found the majority were cash-flow negative over four years, with only two networks on a path to pay off the debt incurred within a network’s 30–40-year typical useful life. Recognizing these challenges, new public-private partnership (P3) approaches that combine elements of both public and private models are emerging. A proposal from the Coalition for Local Internet Choice (CLIC) [and published by the Benton Institute for Broadband & Society], “Public Infrastructure/Private Service,” outlines what the authors call “a pragmatic, community-driven, pro-market, pro-business approach to advancing broadband in communities where solutions have not already emerged.”

[David Gilford is a co-founder of the Broadband Equity Partnership, which helps government, nonprofit organizations, and innovative businesses close the digital divide.]